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J.C. Penney to close up to 140 stores

February 24th, 2017 by WCBC Radio

J.C. Penney on Friday said it plans to close between 130 and 140 stores in the next several months, a move that makes it the latest retail stalwart to pull back from the mall amid the rise of online shopping.

The department store giant's latest quarterly results, also released Friday, illustrate its struggle to connect with shoppers: Sales were down 0.7 percent at stores open more than a year. And yet the report also demonstrated that J.C. Penney, unlike department store rivals such as Macy's and Sears, has had improving momentum lately. The company managed to deliver a net profit in 2016, the first time it has done so since 2010.

J.C. Penney's decision to close stores comes as many industry executives and analysts say that old-school chains are "overstored," meaning they have too many locations for the era of online shopping. Macy's is in the process of closing 100 stores and eliminating some 10,000 jobs. Sears said in January it would close 150 stores, some from its namesake chain, and some from the Kmart chain.

 

Marvin Ellison, the company's chief executive, said in a statement that J.C. Penney is slashing stores because "we believe we must take aggressive action to better align our retail operations for sustainable growth."

The company is set to disclose in mid-March which locations it is to shut down. J.C. Penney said the affected stores account for less than 5 percent of total sales. It expects the closures will result in $200 million of annual cost savings.

It is not clear exactly how many jobs will be affected by the closures

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